Ethereum (ETH/USD) Tanks as ICO Bubble Fears Grow

Ethereum (ETH/USD) Tanks as ICO Bubble Fears Grow

Ethereum fell to one-month lows on Wednesday, as concerns over an ICO bubble brought negative attention to the world’s No. 2 cryptocurrency.

ETH/USD Price Analysis

The ether-U.S. dollar (ETH/USD) exchange rate has been on the back foot for nearly two weeks after a rally failed to lift prices above $400.00. The rally attempt, which concluded Sept. 1, formed a double-top with the June 11 high.

Ether prices are down more than 6% on Wednesday. Prices bottomed at $269.72 before consolidating in the mid-$275.00 region.

One thing ethereum has demonstrated over its short history is that, the longer the consolidation period, the bigger the eventual breakout. The market has been consolidating for over a month, a sign that prices could be poised to break higher in the short term.

Analysts are eyeing a potential breakout at the Sept. 18 Byzantium Testnet launch, which is a precursor to the token’s Metropolis update. Ethereum’s next upgrade is expected to be lighter, faster and even more secure. These are all things to be very excited about.

ICO Bubble Brewing?

Ethereum founder Vitalik Buterin caught markets by surprise this week when he declared that the market for initial coin offerings (ICOs) is “in a bubble.” In Buterin’s view, the upsurge in large scale token sales is unsustainable and will lead to many failed ICO projects. While ICOs are a powerful tool for open source startups, Buterin says they’ve growth too big, too fast.

The ether platform has been essential to the growth of the ICO crowdsale. Practically unheard of last year, coin offerings have already outpaced early stage venture capital. The trend appears to be intensifying as more startups go the ICO route.

In Buterin’s view, many firms are issuing a coin not because it makes sense to do so, but because they have a product they can sell quickly. “Without a coin there is no business model,” he said, according to Finance Magnates.

Crypto Market Cap Falls Below $140 Billion

The total value of all cryptocurrencies has fallen below $140 billion, according to CoinMarketCap. The market peaked near $179 billion less than two weeks ago.

Bitcoin continues to hold onto top spot with a valuation of roughly $66 billion. The BTC/USD exchange rate fell nearly 5% on Wednesday to $3,972.00.

Bitcoin Cash retains the No. 3 spot with a total value of $8.1 billion. Eight other digital currencies are valued at $1 billion or more.

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ADA/USDT in the very latter stages of trading on Sunday was seen nursing chunky losses of over 5%. The price has continued to trade within a choppy nature, a failure to see commitment from either bear or bull camp for ten sessions now. Market participants have been treading extremely cautiously since the steep fall on 10th January. ADA/USDT had plummeted a whopping 22% within the mentioned session. It was the biggest drop in a single session observed since 16th January 2018, where the price tanked around 44%.

Head and Shoulders Formation

ADA/USDT daily chart.

Looking via the daily chart view, price action has been constructing a head and shoulders pattern formation. The left shoulder and head are seen with the right shoulder close to completion. Currently the price on the latest candlestick heading south is edging closer to the neckline, which will determine whether the textbook pattern will materialize. In terms of the vital support (neckline), this is tracking at $0.047000. Should the bears sustain the downside momentum observed in this session, then a breakout could be seen in the next day or two.

Key Support Areas

A breach of the above-detailed neckline will likely open another wave of hard selling pressure. On this potential note, key areas of comfort should be known at $0.039000 (daily support), $0.035500 (27-28th December 2018 low area). Going by the distance between the head and neckline of the pattern, a drop down to the December 2018 lows may be seen. As a result, this would see a retest of the low area from 7th-15th December, $0.027600. Strong buyers came into play here in mid-December to send ADA/USDT back into a decent upside trend.

ADA/BTC Technical Review

ADA/BTC daily chart.

Upside is capped as the price trades within a very stubborn area of supply. There is a chunky amount of resistance that tracks from 0.00001400 down to 0.00001200. The price has not traded comfortably above this region since the start of September 2018. Furthermore, given the continued rejection and lack of upside momentum, ADA/BTC could be seen back down to the demand area below, 0.00001000. Further south, eyes would be on December low area, 0.00000800.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (0 votes, average: 0.00 out of 5)You need to be a registered member to rate this.Loading...

4.6 stars on average, based on 111 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.

Return to $100 Billion Awaits as Crypto Market Loses $5B in One Hour

The cryptocurrency market lost $5 billion worth of value in fifty-five minutes on Sunday, as Bitcoin once again dipped into the high $3,500 range.

The entire stack of cryptocurrencies appears to be on dangerous footing, and despite miraculous growth recorded by various altcoins in recent weeks, one gets the feeling that a return to a market valuation of $100 billion is just a dip or two away.

That’s the valuation the market struck on December 15th, 2018 – a near eighteen-month low at the time. In a search for omens beyond those provided by technical analysis, the current daily trade volume in the $18 billion range is twice the $9 billion recorded during that December low, meaning the current volatile period could be extended a while longer.

Bitcoin Price Sinks

At 11:29 UTC Sunday, the value of BTC sunk from $3,730 down to $3,590 – a 3.75% drop off, and all within fifty-five minutes.

By 12:24 UTC, the rest of the market had followed suit, and small and mid-cap altcoins such as Wanchain (WAN), Ardor (ARDR) and Aion (AION) all lost over 10%. Major altcoins fared only slightly better, and by the end of the drop the global market had sunk from $124 billion down to $119 billion – a 4% drop overall.

Closer to the top ten, several major alts lost between 7% and 10%, including EOS (EOS), IOTA (MIOTA) and NEO (NEO).

EOS Price

EOS sunk 7.14% from the daily high of $2.52 down to $2.34 during the fifty-five minute plunge. Technical analysis from two days ago suggested EOS was on shaky footing, and its losses on Sunday were twice that of Bitcoin, and even more again than XRP.

The highest concentration of trades came from a little-known exchange called Dobi Exchange, where EOS/BTC trades made up almost half of the platform’s daily turnover.

IOTA Price

From MIOTA’s daily high of $0.325250, the coin price fell 7.6% down to $0.300415. That wipes out most of MIOTA’s gains for the week, and returns the coin to the $0.30 range – one which has been in and out of play since late November of last year.

USDT and BTC trades dominated among MIOTA’s pairs, with ETH and KRW only offering single digit percentages of IOTA’s $7 million daily trade volume. IOTA had recorded 17% growth during the previous week, with $0.28 remaining the weekly base.

NEO Price

After falling out of the top ten, and almost the top twenty during 2018’s market plunge, NEO recorded 77% growth leading into January – more than Ethereum or XRP managed during the same time period.

On Sunday however, NEO saw a reduction of 10% as the coin price fell from $8.37 down to $7.53. NEO trade volumes rose 49% over the weekend, topping $161 million thanks to increased action on the DragonX, BitForex and Bit-Z exchanges.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Price Behavior

DASH/USDT has been trading within a $6 range for the tenth session in a row, at the time of writing. The upper part of this range should be noted at $73. Looking to the downside, the lower support of the formation is seen at $67. The price, like many of its peers within the cryptocurrency market, is stuck within a narrowing range block. They are all currently demonstrating strong downside vulnerabilities, given the current behaviour.

This trading range came after a steep fall in the market last Thursday, 10th January. Double-digit losses were seen across the board after moving within a prior narrowing range formation. DASH/USDT had a strong run from 15th – 24th December, gaining as much as 81% within that time frame. Following the high print towards the latter part of that period, at $102.50, price cooling was seen and then begun to trade sideways.

Between 26th December 2018 – 9th January 2019, DASH/USDT was moving between a narrow $86 at the high and $73 at the low. This led to the explosive breakout to the downside, where the price dropped around 20% on 10th January.

Trust Wallet Supports Dash (DASH)

Trust Wallet, a mobile crypto wallet owned by Binance, announced earlier this week that it has added support for Dash. The announcement followed after just a week ago, when the wallet provider revealed the support of Litecoin (LTC), Bitcoin (BTC), and Bitcoin Cash (BCH). In addition, the app also supports Ethereum (ETH), Ethereum Classic (ETC), Tron (TRX) and others.

The team at Trust Wallet, upon their DASH support update, also left users somewhat excited about further announcements lined up. They stated, “Going forward, we will monitor the performance and stability of our Dash release very closely, and if everything works well, hopefully, we can surprise you with more new coins in the coming weeks!”

Technical Review – DASH/USDT

DASH/USDT daily chart.

A breakout of the key mentioned levels that make up either side of the range, $72 and $67, will likely determine the next committed trend. Firstly, in terms of the next major area of support south, eyes will be on the December low area, $58. To the north, drop supply remains heading into and just above the psychological $100 mark.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. (1 votes, average: 4.00 out of 5)You need to be a registered member to rate this.Loading...

4.6 stars on average, based on 111 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.

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